Virgin Mobile expects to meet full-year targets despite setbacks |
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Tue, 19 Jul 2005 22:35
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LONDON: Britain's fifth largest mobile phone company, Virgin Mobile Holdings PLC has admitted that the number of its customers in the first quarter of the year had dwindled by almost 50 percent as compared to last year's figures.
The company said that in the quarter ending June 30, only 77,000 new subscribers had used their SIM cards in the past three months as compared to 150,000 during the same time last year. However, Virgin mobile remained confident that it would be able to meet its full-year revenue growth target in spite of these setbacks.
The service revenues did rise by 6.8 percent, however, it must be pointed out that these figures are way below the target set by the company. The rolling ARPU (average revenues per user) registered a 4-pound dip, dropping from 127 pounds to 123 pounds.
However, the fact that the service revenue showed a good margin of growth from the 457.3 million pounds ($799 million) at the end of last year has prompted Virgin to say that it is on target to achieve its full-year revenues according to expectations. Stephen Day, corporate affairs director at Virgin said, "We're very comfortable with the subscriber growth figure. We do think there is a bit of a slowdown across the market in terms of net adds, but there is no slowdown on the high street."
It is now pretty obvious to analysts and companies alike that the UK mobile market is pretty much saturated. Growth in such conditions can come from only one direction, getting new customers from other service providers. Virgin mobile has recognized this fact and has said that it was looking to get new subscribers to sign up for its contract deal.
The company issued a statement saying that the contract part of its business was strong, “We remain confident of full-year service revenue growth in the mid teens. The business remains strongly cash generative and we continue to expect a broadly stable cash flow margin with an increased dividend payout ratio of 50 percent for the 2005/06 financial year,” the statement added.
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